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The Vietnam National Textile and Garment Group (Vinatex) said though forecasts had been made early, its members were still surprised at unpredictable changes in 2022 such as the Russia - Ukraine conflict and surges in oil prices, inflation, and interest rates, which have caused demand to nose-dive in importing markets.
Yet Vinatex estimated its 2022 consolidated revenue at over 19.53 trillion VND (826.84 million USD), up 15% from last year and 8% higher than the target, and consolidated profit at more than 1 trillion VND, up 14.6% from the target. These figures are assessed as encouraging amid numerous market difficulties.
Pointing out three scenarios, Vinatex President Le Tien Truong said in the best-case one – the global economy will have become stable and geopolitical conflicts been over by the end of the second quarter - exports next year may go up 4 - 5% from 2022.
In the middle-case scenario – instabilities will linger on, inflation remain, and interest rates still increase until Q3 - exports may stay unchanged compared to this year. And in the worst-case one where the world economy will enter a recession, the 2023 revenue may be about 5% lower than that of this year.
Meanwhile, the Vietnam Textile and Apparel Association (VITAS) has forecast its export revenue this year is likely to stand at nearly 44.5 billion USD, up 10% from 2021.
For 2023, textile and garment exports may reach 47 - 48 billion USD in the positive scenario and 45 - 46 billion USD in the lower-case scenario, Vinatex noted, adding that how enterprises adapt to changes in markets will affect their growth in any circumstance.
In the positive scenario – instabilities in the global market will be brought under control, all activities of the sector may have recovered by the end of next year’s Q1. In such case, 48 billion USD in revenue is achievable.
However, VITAS President Vu Duc Giang said, in the second scenario under which the global market will recover in the latter half of 2023, export turnover may reach 45 billion USD.
In the current context, when international markets do not place long-term textile and garment orders, businesses can switch to producing lower-value items. In 2022, as they have started to diversify markets and products, growth is still sustained.
In any scenario, textile and garment markets will be unable to bounce back at least in the first half of 2023.
However, experts held that there are still certain bright spots next year, noting the COVID-19 pandemic is being put under control, the world getting used to a new normal, the Asia-Pacific predicted to be the fastest-growing region in 2023, China easing the zero-COVID policy, and logistics costs showing signs of declining.
Cashless payment promoted in rural, remote areas
Thanks to efforts of the Government and the State Bank of Vietnam (SBV), cashless payment services have been promoted in rural and remote areas.
According to Dinh Quang Dan, Vice Director of Customer Service Department of Agribank, in the past three years, the number of customers opening new accounts and registering digital banking services in far-flung areas has been rising, which reflects a change in the payment habit of people.
Particularly, the introduction of Mobile Money service has become an important motivation for cashless payment in Vietnam. According to the SBV, so far, the country has nearly 72,000 transaction posts providing cashless payment services, of which, 39,000 are in rural and remote areas. In the first nine months of 2022, nearly 14 million customers, of whom 37.5% were from rural areas, used cashless payment services with total transaction value of 167.68 trillion VND (7.09 billion USD). According to Pham Anh Tuan, Director of the SBV’s Payment Department, this is an impressive figure.
For Mobile Money service alone, as of the end of September, the service had 2.34 million accounts, including 1.62 million from rural and island areas. To date, about 15 million transactions worth nearly 950 billion VND have been conducted.
Deputy General Director of Viettel Digital Truong Quang Viet said that Viettel Digital expects to have 2 million users of its Mobile Money service, 60% of whom are in rural and remote areas, with more than 3,000 transaction points as of the end of 2022.
Meanwhile, Deputy General Director of the National Payment Corporation of Vietnam (Napas) Nguyen Hoang Long said that Napas has covered more than 50 banks.
Tuan said that in the time to come, the banking sector will continue to coordinate with the Ministry of Public Security to roll out effective piloted measures to further promote cashless payment in rural and remote areas.
Efforts to help labour-intensive industries retain employees
In the hope of recovery, businesses are making great efforts to maintain production and retain staff amid an economic slump.
Not only the labour-intensive textile industry of Việt Nam, but the entire global market is facing difficulties due to decreasing demands induced by a recession, according to Lê Tiến Trường, chairman of Vietnam National Textile and Garment Group (Vinatex).
In addition to the increasingly stringent requirements for a production price reduction, faster delivery and higher quality, brands are demanding that businesses in the supply chain follow multiple policies on sustainability, green practices, energy saving and emission limiting.
Member enterprises from HCM City Association of Garment, Textile, Embroidery and Knitting (AGTEX) are also seeking solutions to maintain production and keep employees on their payroll, with the aim of not having any workers laid off due to the shortage of orders.
AGTEX chairman Phạm Xuân Hồng said that nearly 70 per cent of these firms were affected due to a 20 to 30 per cent drop in orders, the majority of which are exports. The remaining 30 per cent of these businesses still see a stable volume of orders.
The average bonus for Tết (Lunar New Year) holiday for workers is 1.5 times the monthly salary. Some businesses opt to divide this payment into two parts, one paid a month before Tết and the other half a month after the holiday.
Nguyễn Ngọc Lân, general director of Nhà Bè Garment JSC, one of the larger corporations that were less affected by the economic downturn, said that his company still maintains the productive atmosphere in the factories despite shortened working hours.
Amid the fluctuations of the labour market before the Tết holiday, HCM City’s Department of Labour, Invalids and Social Affairs is focusing on reviewing employment demands, while also proactively working with neighbouring cities and provinces to organise job fairs prior to and after the holiday.
According to the department’s deputy director Nguyễn Văn Lâm, surveys revealed that many people wanted to stay in the city and find new jobs, while others don’t have the intention to seek employment immediately and would wait until after Tết.
Usually, after Tết is when people return to the city to seek new employment opportunities or change jobs.
Vietnam Chamber of Commerce and Industry (VCCI) said that the case where workers are laid off or have their working hours reduced at the end of the year is only taking place in several places and sectors.
However, layoffs in some labour-intensive industries such as textiles and footwear have had a negative impact on the general labour market, which has just recovered after the COVID-19 pandemic.
Vi Thị Hồng Minh, deputy director of VCCI bureau of employer activities, said that connecting unemployed people to job opportunities is only a temporary solution.
In the long term, there must be support policies for businesses to retain employees.
A VCCI survey also stated that many businesses want to keep staff on the payrolls, but the financial pressure proves to be too much for them to bear.
Therefore, governmental policies are needed for simplified procedures, diverse credit sources, and relaxed requirements for easier access to financial support in order for businesses to retain their staff.
Another suggestion is to reduce trade union fees and extend the payment period for social insurance so that enterprises have more resources to maintain their production, which also helps with staff employment.
VN to enhance competitiveness of logistics industry
Viet Nam will focus on enhancing the competitiveness of the logistics industry and make it a high-added value services sector to promote socio-economic development, according to the Government’s Decree No 163/NQ-CP issued late last week.
According to Tran Thanh Hai, Deputy Director of the Import-Export Department under the Ministry of Industry and Trade, the logistics industry of Viet Nam had large potential for development, given the heavy investments in infrastructure systems including building and expanding expressways, airports, seaports, and logistics centres.
The heavy investment in infrastructure development was creating significant opportunities for logistics enterprises, Hai said.
In addition, Viet Nam’s production and trade was recovering quickly with the country’s import-export revenue hitting a new record of US$700 billion this year.
Hai, however, noted that 2023 would be a difficult year because the global economy was in a recession coupled with high inflationary risk, which would lead to a decrease in trade activities as well as logistics activities.
He urged enterprises to prepare for uncertainties in the context of the ongoing Russia – Ukraine conflict, natural disasters, diseases, or unexpected incidents.
To promote the development of the logistics industry, the focus would be placed on promoting the logistics industry development with production, import and export activities. The drivers would come from the transportation and information technology infrastructure development, enhancing the competitiveness of logistics services companies and increasing linkages to make Viet Nam an important logistics hub of the region.
It was also necessary to establish sustainable supply chains, improve the quality of human resources and promote digital transformation and technology application in the logistics industry.
In addition, the policies of taxes and fees would be reviewed while customs procedures would be further simplified to create favourable conditions for logistics services providers.
The resolution also aimed to promote the development of green logistics.
Green logistics was arising to be a trend and an important indicator for the sustainable development of the logistics industry.
A report by the Ministry of Industry and Trade found that only 31 per cent of logistics enterprises used renewable energy in warehouses operation, 26.8 per cent did not have green development strategies and 35.2 per cent did not have activities related to environmental monitoring.
Untapped opportunities for Vietnamese food and beverage in the Netherlands
There remain untapped opportunities for Vietnamese cooperatives and businesses to ship their food and beverage (F&B) products to the Netherlands if they can find out and overcome their weakness, experts have said.
The Netherlands is Viet Nam's second-largest trading partner in the EU market after Germany. It is also considered one of the gateways for Vietnamese goods to penetrate this vast market.
Furthermore, the EU-Viet Nam Free Trade Agreement (EVFTA), which officially came into effect on August 1, 2020, has also opened up opportunities for Viet Nam's F&B producers to boost their exports to the Dutch market.
According to Niel Nguyen, Director of VIEC said that the demand for F&B products from the Dutch people had increased after the country's inflation had been controlled and oil shortage had not occurred.
Nguyen cited surveys saying that nearly 50 per cent of Dutch people drank fruit juice daily. Coffee was their favourite drink, only after water taken from the tap. They were followed by beverages such as tea and non-carbonated mineral water. These were all potential Vietnamese products.
However, he said it was not easy for Vietnamese small and medium-sized enterprises and cooperatives to get access and conquer the Dutch market despite its high demand for F&B products.
Nguyen added he could hardly find Viet Nam-branded juice and coffee products on a large electronic platform in the Netherlands, even though Viet Nam was the leading coffee exporter in the world.
The prices of F&B products in the Netherlands were not cheap. But he noted that if cooperatives and businesses from Viet Nam could not take advantage of their strength of raw materials and invest in deep processing, they could not penetrate this market.
PetroVietnam seeks new EPC contractor for 1,200MW Long Phu 1 thermal power plant
State-run oil and gas group PetroVietnam is looking for a new EPC contractor for the 1,200MW Long Phu 1 thermal power plant, which is located in the Mekong Delta province of Soc Trang.
According to the project’s management board under PetroVietnam – the plant's investor – the board has completed plans to select a new EPC contractor for the thermal power plant. The board will submit these plans for PetroVietnam for approval this month.
The former contractor was Power Machines – one of the world's largest power engineering companies. The Russian company announced an end to the contract in February 2019 after the US Department of Treasury imposed sanctions against it in January 2018.
PetroVietnam has called on other companies to take over the EPC contract, with three contractors showing an interest. It is a key project under the government’s power development plan for the 2011-2020 period.
The coal-fired power plant is part of Long Phu Power Centre, which comprises three coal-fired power facility projects (Long Phu 1, 2, and 3) and other ancillary technical infrastructure with a combined capacity of 4.4GW. PetroVietnam is the project owner and developer.
The Long Phu 1 and 2 power plants will feature two 600MW units each, while the Long Phu 3 will feature two 1GW units.
Upgrading of Cai Mep – Thi Vai port cluster to be executed early next year
The Maritime Project Management Unit under the Ministry of Transport has approved a plan to select contractors for packages such as site survey consultancy, drawings preparation and bomb disposal to upgrade the Cai Mep – Thi Vai port cluster from Buoy No.0 to the Cai Mep Container Terminal.
The Maritime Project Management Unit has chosen a contractor to take charge of dredging and transporting sediments and debris for disposal from Buoy No.0 to the upstream of the Cai Mep International Terminal in Phu My town, Ba Ria – Vung Tau Province.
Meanwhile, the selection of a consultancy contractor and environmental monitoring and assessing contractor are being expedited together with preparations for site delivery.
Work on the project is scheduled to commence in early February 2023 and be completed in 2025 with a total investment capital of VND1,400 billion from the State budget.
According to the Ministry of Transport, the navigational channel from buoy No.0 to the upstream of the Cai Mep International Terminal (CMIT) is designed for ships of 160,000 deadweight tonnage (DWT) with a full load and 120,000 DWT vessels for two-way operation.
The section from upstream CMIT to upstream of the Tan Cang-Cai Mep Container Terminal (TCCT) is designed for ships of 120,000 DWT with full cargo and vessels of 100,000 DWT operating two ways.
The section from the upstream of TCCT to the port of Phuoc An is designed for ships of 60,000 DWT full load or larger for one-way operation.
Vietnam’s textile, garment exports to Indonesia increasing: TexPro
Vietnam’s textile and garment export turnover to Indonesia reached US$10.057 million in September 2022, more than four times that of the previous month.
According to the market analysis tool TexPro of the US website Fiber2Fashion, the figure was $2.354 million in August, $5.257 million in July, $3.801 million in June, $1.232 million in May and $2.719 million in April.
The increasing trend was recorded in the third quarter of 2022 when the figure neared $17.7 million , up from $7.753 million in the second quarter, and $15.972 million in the first quarter.
Last year, the figure was $13.308 million in the fourth quarter, $51 million in the third quarter, and $12 million in the second quarter.
Indonesia's garment and textile imports from Vietnam reached $53.543 million in 2021 and $41.611 million in 2020.
For the last few years, Indonesia has been a net importer of clothing products from Vietnam.
Soc Trang proposes formation of research center for marine economic development
The People's Committee of the Mekong Delta Province of Soc Trang proposed a formation of a research center to support its marine economic development.
The People's Committee of the Mekong Delta Province of Soc Trang proposed a formation of a research center to support its marine economic development
At the recent meeting with the delegation of the Ministry of Science and Technology, the People's Committee of Soc Trang Province proposed the Ministry of Science and Technology support the mobilization of all resources for cooperation, especially from international sources, to form a research center for the province’s marine economic development.
The center will serve for the development of the Mekong Delta in agriculture, green economy, circular economy, and renewable energy.
E-procedure service expansion proposed for inland waterway vehicles
After a year of trial implementation of online procedures for inland waterway vehicles entering and leaving seaports in Ho Chi Minh City, enterprises proposed to continue to maintain and widen the service to other ports.
According to the Vietnam Maritime Administration, the pilot results showed that the Maritime Port Authority of Ho Chi Minh City had performed the online procedures for 7,478 waterway vehicles which are regularly entering and leaving the ports, accounting for 32.5 percent of the total number of vehicles operating in the area.
The Vietnam Maritime Administration assessed that the pilot implementation met the set target, enhancing the management effectiveness and limiting the contact between officials and people submitting procedures to prevent harassment and negative things.
Besides, enterprises highly supported the service which helped them to save time and costs and be easy to search and archive.
Businesses and associations joining the pilot program are unanimous in maintaining the service in Ho Chi Minh City and desire that the service will be expanded in the Southeast and Mekong Delta regions to create connection and synchronization with HCMC’s seaports.
Basing on the successful trial results, the Vietnam Maritime Administration proposed the Ministry of Transport allow it to continue to apply the service in Ho Chi Minh City for 12 more months, starting from January 1 of 2023. After that, state management agencies will estimate the results heading to expanding the service to other ports.
Vietnam boosting ‘golden’ remittance flow
The efforts of Vietnam to improve the business – investment environment lately have attracted more remittances into manufacturing and trading activities, greatly contributing to the national economic growth.
Statistics from the Ho Chi Minh City Branch of the Vietnam State Bank reveal that in 2018, 72 percent of the remittances entering the city was investments in manufacturing and trading activities, 22 percent in real estate purchasing, and the rest in relatives supporting.
In general, from 1991-2015, the total volume of remittance into Vietnam reached US$104.5 billion, only preceded by the Foreign Direct Investment (FDI) and much larger than the disbursed amount of Official Development Assistance (ODA) capital. Since 2019, the remittance quantity flowing into the country, in particular into HCMC, has seen a gradual rise. This year’s remittance amount into HCMC is expected to reach $6.8 billion (an increase of 3 percent compared to 2021 at $6.6 billion and 2020 at 6.1 billion).
Obviously, this has been a great source to boost the retail markets, which in turn creates more jobs and promotes economic development. The growing remittance flow can also increase deposits into and credit in financial institutes, fostering legal reforms in the financial field and the introduction of more practical policies to attract even more remittances.
In addition, this ‘golden’ remittance resource not only directly aids Vietnamese citizens via social welfare and charity programs but also helps to reduce the pressure on the foreign exchange market so that the Government can adopt policies on exchange rates, increase its foreign exchange reserve in order to stabilize the macro-economy as well as strengthening the national financial potential.
Firms nationwide announce year-end bonus for employees
The departments of Labor, War Invalids, and Social Affairs in cities and provinces announced firms in the country have reported year-end bonus.
The Department of Labor, Invalids and Social Affairs in Ho Chi Minh City said that as of December 20, roughly 1,078 enterprises with 222,745 employees in the city reported their salary situation in 2022 and bonus plans for Tet holiday (the Lunar New Year).
Accordingly, the highest Tet bonus rate belongs to enterprises in electronics - information technology, finance - banking, commerce, food processing, packaging and plastic production. Small-scale production enterprises employing unskilled workers have lower bonuses.
Specifically, a foreign-invested enterprise announced a year-end bonus of VND 606 million - the highest bonus level on New Year's Eve 2023 while the lowest bonus is VND930,000 a person. The average New Year bonus is VND3.14 million a person, about 7.37 percent lower than in 2021.
The average level of bonus for the 2023 Lunar New Year is nearly VND12.9 million a person, 45 percent higher than last year. The highest bonus is more than VND756 million a person from an FDI enterprise and the lowest bonus is VND 4.86 million a person.
However, according to the department, some 386 enterprises accounting for 35.81 percent faced difficulties in giving Tet bonuses to employees due to dilemmas in production and business activities, reduced orders, and operational shrinkage. However, businesses still tried to give Tet bonuses to employees according to the bonus regulations, labor agreements, and labor contracts. In addition, around 447 enterprises also have had many practical forms of support for employees during the Lunar New Year such as giving Tet gifts, vouchers, lucky money, organizing shuttle buses, or providing support, train fare, and coach ticket donation in addition to Tet bonuses.
Elsewhere in the country, the Department of Labor, Invalids and Social Affairs in the Central City of Da Nang said that no enterprises announced no Tet bonuses in 2023 for workers.
Accordingly, state-owned one-member limited liability companies have the highest bonus of VND23 million for the New Year bonus in 2023 and the lowest VND1 million. In joint-stock enterprises with capital contributed by the State, the highest bonus is VND2 million and the lowest is VND200,000. Private enterprises have the highest bonus of VND25 million and the lowest VND100,000. FDI enterprises have the highest bonus of more than VND161 million and the lowest of VND100,000.
Regarding the bonus level for the Lunar New Year of the Cat in 2023, for one-member limited liability companies with 100 percent charter capital held by the State, the highest bonus and the lowest are VND 48 million and VND4.5 million respectively.
Employees of joint stock enterprises with capital contributed by the State will enjoy the highest and the lowest bonus of VND 90 million and VND 800,000 respectively while their peers in FDI enterprises will receive the highest bonus of more than VND 484 million and the lowest of VND100,000. In particular, the bonus level for the Lunar New Year of the Cat in 2023 is recorded at private enterprises with the highest bonus of more than VND1 billion and the lowest of VND200,000.
The Department of Labor, Invalids and Social Affairs in the Southern Province of Binh Duong said that it has received reports from 1,125 businesses in the province on the 2023 Lunar New Year bonus for employees.
Accordingly, employees of FDI enterprises will get a VND38 million bonus - the highest level. An Cuong Wood Company in Binh Duong Province’s Tan Uyen Town will offer the highest bonus for the New Year of VND 896 million to its employees. On average, the average Tet bonus of businesses this year is VND 6.13 million a person. According to the Binh Duong Provincial Labor Confederation, there are more than 4,000 businesses with trade unions.
On the occasion of the Lunar New Year 2023, about 46,000 disadvantaged workers will receive additional support of VND1 million a person as a proposal.
Da Nang wishes to resume direct flights to Cambodia
Da Nang expects direct flights linking Vietnam’s central city and Cambodia will be re-launched soon to help promote trade, investment and tourism cooperation between the two sides.
Luong Nguyen Minh Triet, deputy secretary of the Da Nang Party Committee, was speaking at a reception for Men Som An, member of the Cambodian Senate, on December 26.
Da Nang and Siem Reap had launched a direct air route before COVID-19 broke out, contributing greatly to trade-tourism cooperation between the two sides, said Triet.
Now with COVID-19 bought under control, Da Nang wishes to resume the air links with support of the Cambodian Senate as well the Cambodian Embassy in Hanoi, he noted.
According to the official, Da Nang has so far resumed flights to seven destinations worldwide.
Triet also briefed his guest on the city’s major development achievements in 2022, saying Da Nang has secured a 14% economic growth and has attracted 843 investment projects from more than 40 countries and territories worldwide. The city has established relations with 47 localities of 22 countries and territories, with 103 cooperation agreements inked.
Da Nang has established relations with Battambang since 2012. The two sides have conducted visit exchanges and implemented a range of cooperation programmes.
Men Som An welcomed Triet’s proposal, saying the resumption of the direct flight between the two sides would increase tourism cooperation because Cambodians prefer traveling to Da Nang.
She took the occasion to thank Vietnamese experts and soldiers for assisting Cambodia to overcome the Khmer Rouge genocidal regime and rebuild the country in the past.
Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes
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